Potential tax increases draw residents to council meeting

Wednesday

Jul 30, 2008 at 12:01 AMJul 2, 2012 at 5:45 AM

Tony D'Souza

Against the noise of a Union Pacific train sounding its horn, the Dunsmuir City Council opened a much anticipated public discussion on tax proposals put forth to help it meet a severe budget shortfall. The discussion took place during the council’s regularly scheduled meeting Friday morning, July 25, beneath the results of a city-wide survey projected onto the chamber wall.
City administrator Keith Anderson described the dire financial situation facing the city. “We’re asking today that the council give direction to the staff on any of these proposals,” he said. “The city faces a $182,000 budget shortfall every year. This is happening to communities all over the country. We have to do what everyone has to do when these things happen. You either go out and get another job, or you tighten your belt.”
At the heart of the discussion were the recently released results of the survey mailed to residents in late June. The survey asked residents to rate city services, and whether they would support a number of different tax increases. According to the survey results, which had a 95% confidence level with a margin of approximately plus or minus 5%, Dunsmuir residents overwhelmingly said they would not support a Utility User Tax. The less costly Fire Fund Benefit Assessment increase and Drainage Fund levy, however, both garnered majority support.
Mayor Guzman thanked the community for participating in the survey, and Anderson opened discussion on the unpopular Utility User Tax.
“If we pass the tax, every penny will go into the City’s General Fund,” Anderson said. “Pacific Power will add it as a line to the monthly statements, they won’t even charge us an administrative fee. We can put the tax onto any utility. A good suggestion would be to put the tax on cellphones. People with good incomes are more likely to have cell phones than people on fixed incomes.”
Resident Anna Mulvany spoke for the 60% of survey respondents who do not support the estimated 50 cent a day per user utility tax by telling the council, “I’m not prepared to pay 37% more on my tax bill,” she said.
However, Virginia Barham warned that if the tax was not passed, “We’re going to have to do with less services. I don’t think people are connecting this money with services. If we want to have a city, we have to pay for it.”
In speaking against the tax, Dan Weiner said, “We have to accept that this is not a wealthy community. I do worry that my neighbors are going to be able to pay for their medicines.”
Council member James Phelps suggested, “Maybe people would support the tax if it was 25¢ a day instead of 50¢,” while council member Tim Padula was skeptical that anyone could not afford the tax increase. “If you don’t have $18 to pay for this, something is wrong. We need to be bottling water and installing zip lines and getting some recreation around here,” he continued. City treasurer Merry Padilla suggested, “Let’s put something on our tax bill that our homeowners can use as a deduction,” and Administrator Anderson told the assembly, “The Fire Fund assessment is a deduction for homeowners, but the Utility tax and Drainage fund are not.”
Some county residents from the area south of the Dunsmuir city limit asked that their properties be annexed by Dunsmuir. “You people need to reconsider taking us into your city,” Marilyn Dilles told the council. Anderson responded by giving the audience a brief history of the annexation suggestion. “So far it has met with total resistance at the county. You’re asking them to give up that tax money.”
Discussion focusing on the Fire Fund Benefit Assessment Increase and the Drainage Fund was overwhelmingly positive among the public and council both. Barbara Cross said, “I support all three measures, and I would recommend the Fire and Drainage measures. People are concerned about protecting their homes.” Of the Drainage Fund, Anderson described how the small initial tax sum could potentially turn into much more. “If we can establish this Drainage Enterprise Fund of $12,000 a year, we’ll have the money to put up against a $90,000 grant.” Dunsmuir sits on 21 springs which pose significant challenges to the city every year, and take money from the General Fund. The Drainage Fund will alleviate that.
At the end of public discussion, the council voted to support the Fire Fund and Drainage measures while abandoning the Utility User Tax for now. Any tax increase will have to be approved by voters in a special ballot before being implemented.

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